Dual-branded hotels come of age
 
Dual-branded hotels come of age
29 OCTOBER 2018 7:11 AM

A new generation of dual-branded hotels includes properties with three brands and ones with flags from different brand companies.

Editor’s note: This article was originally posted on 26 September 2013. The article was chosen as part of Hotel News Now’s look back at 10 years of the hotel industry.

PHOENIX—Dual-branded hotels aren’t new, but the product has become increasingly popular with developers, and more will be built in the next few years in a variety of formats, said participants in a think-tank session titled “Dual brand hotels” at the 19th annual Lodging Conference.

While most dual-branded hotels feature separate brands from the same brand family, new innovations include three hotels within the same brand company and at least one project with units under one roof from three different brand groups.

“(Dual brands) create a lot of synergies on both the construction side and the operations side of the project,” said Craig Mance, senior VP of North America development for Hilton Worldwide. “They need one set of entitlements, one set of signs and often one set of meeting rooms, one pool and one public laundry. And it’s the same in the back of the house, where things like kitchens, engineering departments, (telecommunications) and employee areas can all be shared.”

Mance, who refers to dual-branded hotels as “two packs” or “three packs,” said Hilton has 20 open and 22 under development or waiting for approval. Approximately 90% of the projects are in the United States or Canada with the remainder in Europe.

The concept
There are limits to what facilities can be shared, and brand executives strive to maintain as many brand hallmarks as possible in each unit.

Hilton, for example, insists on separate guest entrance and check-in experiences.

“This is an area which is very serious to our brand people,” Mance said. “Homewood Suites has the Lodge and Hilton Garden Inn has the Pavilion, and they’re special to each brand. This (policy) will stay sacrosanct, and I don’t see that changing.”

Hyatt Hotels Corporation has two dual-brand properties open and five under development. Like most dual-brand hotels, all but one of Hyatt’s units combines a select-service brand (Hyatt Place) with an extended-stay hotel (Hyatt House). The exception is a three-property, 664-room project White Lodging opened earlier this year in downtown Chicago that includes a Hyatt Place, an Aloft from Starwood Hotels & Resorts Worldwide and a Fairfield Inn from Marriott International.

Jim Chu, senior VP of Hyatt’s franchise and owner relations group, said the three hotels are in one building with separate facades, entrances and front desks.

“It looks like three different buildings, but it has one core,” he said. “The guest experiences are on-brand for all three pieces, and each has its own GM, management staff and reservations system. They share meeting space, maintenance staff and (certain aspects of) the guestroom TV platform.”

Dual-brand properties in the Hilton and Hyatt systems are essentially each two complete hotels joined together. Choice Hotels International has a different strategy in which elements of two of its brands (Sleep Inn and the extended stay MainStay Suites) are combined into one property, typically with between 60 and 120 rooms. Choice has one open in Port St. Lucie, Florida, and 11 under construction or development, said Shane Platt, regional VP of franchise sales.

Platt said Choice’s approach came from several franchisees in small markets who asked if they could add some extended-stay-type rooms to their regular mix of transient rooms.

“At first we said no, but then saw an opportunity to create a new concept that combines elements from both brands,” Platt said. The prototype the company created includes exterior design elements from both Sleep Inn and MainStay but shares front desks and continental breakfast service.

“The Sleep Inn breakfast standard is a little nicer and has a few more items so that’s what we use,” he said.

Platt said Choice will be opportunistic in its dual-brand growth strategy.

“It’s not about wanting to develop a dual-brand hotel,” Platt said. “It’s about wanting to develop in a market and what’s the best product for that market. Sometimes, it might be a dual-brand hotel.”

The design process
Design and development of dual-branded hotels can be costly and time-intensive, said the panelists.
“These can be expensive deals to do with the costs akin to (develop) a full-service hotel,” Chu said. “Throughout the development process you need to look for efficiencies in order to create a product with the return model of a select-service hotel.”

Bob Neal, a principal with Cooper Carry, an architecture firm, said developers need to consult with design professionals early in the development process to realize all possible efficiencies.

“While shared back-of-the-house facilities are always part of the mix, among the first discussions the design team has with the developer and the brand team should be about what facilities and amenities can be shared,” he said.

“Everything about (a dual-branded hotel) is custom, from the franchise agreement to the architecture and design,” said Cara Shimkus Hall, principal with GH2 Hospitality Architects. “Since nothing follows off-the-shelf brand standards, it’s important to build that into your (development) schedule.”

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